Millions Take-Up New Option To Pay Road Tax By Direct Debit

Millions Of Drivers Now Pay By Direct Debit

More than 10 million motorists switched to paying Vehicle Excise Duty by Direct Debit since the option became available in the United Kingdom in November 2014, Bacs Payment Schemes Limited reveals.

There are about 35 million licensed vehicles in the country. Bacs – the organisation responsible for the Direct Debit Scheme – said research showed that 59% of motorists argues that paying by Direct Debit offers “peace of mind” as it eliminates the risk of forgetting to make a payment.

An error of this nature could lead to a fine. Further, 67% say that automated payments save time.

Bacs Payment Schemes Limited Chief Executive Officer, Michael Chambers, says: “The option of paying for vehicle tax by Direct Debit has proved incredibly popular in its first year, even more so than we originally anticipated. So far, we've processed almost 54 million payments.

Mr Chambers continues: “This is another demonstration of how Direct Debit remains relevant to today's bill payers and billers alike. Just this year we processed 103 million transactions in a single day - a new record for us - and last year we processed more than 3.6 billion Direct Debits, another record.”

The DVLA confirmed its intention to make Direct Debit payments available for Vehicle Excise Duty in December 2013. It said we: “Will offer motorists the ability to spread their vehicle tax payments should they wish to do so. Motorists will be able to pay vehicle tax by direct debit annually, biannually or monthly.

There will be no additional handling fees for annual payments, but to limit the impact on the public finances there will be a small surcharge of 5% of vehicle tax for biannual and monthly payments. This is half of the 10% surcharge that is currently applied to 6 monthly tax discs and which has been in existence for a number of decades.”

New Rules For UK Road Tax

The Vehicle Excise Duty Direct Debit payment option roughly coincided with the launch of other initiatives to make life easier for motorists and improve efficiency.

The paper tax disc was abolished, for example. This receipt – that in the past police officers required to confirm compliance with the law – has been superseded by an electronic database that automatically spits out fines. Further, Excise Duty can no longer stay with vehicles when they are sold so any remaining months are automatically refunded.